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April 20, 2022

Why QED invested in Financepeer

Education holds paramount importance in India. Academic achievement is a critical currency and a calling card in the country and even within the global diaspora. Unlike their international peers, founders from India always discuss their educational background and emphasise it in their pitch decks. Middle-class households often consider good education the main asset that their children will inherit from them.

This phenomenon clearly shows through in consumer credit behaviour at FinancePeer. School fees are the last liability that a parent would ever default on. Thus, the charge-off rates for school fees’ loans are meagre even in times of adversity, making the unit economics immediately sensible.

More broadly, education becomes a notional “collateral” to lend to middle-class households. It provides a sustainable basis to ease their cash flows. It becomes a platform to advance credit that is financially responsible yet material for the borrowers.

These insights powered our investment in Financepeer.

I connected with Rohit, Naveesh, Debi, Sunit and the team before Diwali’2021. They had worked with schools and parents for a few years and understood the concerns. They had created and begun to scale a platform to address the financing needs.

More broadly, they envisioned the entire infrastructure around payments, rewards, cross-sell, and SaaS to better serve their customers – it was amazing to see this in living colour! At QED, we have seen several successful companies built around serving the entirety of customer needs within particular segments. Specialising with customers allows these companies to develop better products and service them in a tailored manner.

Over the last few months, I have been impressed by the team’s energy and inventiveness in building across product breadth. I am delighted to commence our journey together formally – this space is opportune for impact and growth – and I can’t wait to see what they will achieve next.